Category: SG Stocks And Shares

Stocks to watch

Stocks to watch:
*Economy: Economists do not expect the MAS will not tighten the exchange rate policy in Apr or even this year despite the recent stronger growth data as the Singapore economy is still on a weak footing and private investment has yet to pick up.* Property. After regulators closed a tax loophole that allowed developers to offload properties in bulk to institutional investors or wealthy Singaporeans, developers now face the unpalatable choice of discounting luxury homes to dispose inventory, or pay stiff QC charges for missing stipulated sales deadlines. MKE prefers UOL (Buy, TP: $7.68) for sector exposure.

* Sembcorp Marine/ Keppel Corp. US District Court for Columbia has dismissed the claims filed by EIG Management against Petrobras, pertaining to EIG’s investments in Sete Brasil. SMM and Keppel Corp were among rigbuilders that were named as defendants in the suit. MKE has Sell ratings on SMM (TP: $1.00) and Keppel Corp (TP: $4.57).

*SGX: Colloborating with Tullett Prebon to launch a LNG spot index to offer a trusted reference price for LNG delivered to key ports in Dubai, Kuwait, and India. Separately, it has also inked agreements with equity crowdfunding platform Crowdo and PwC’s entrepreneurship consulting unit Venture Hub to help start-ups improve capital access.

*Yangzijiang: Won 13 shipbuilding contracts amounting US$318m in 1Q17. This comprises five 82,000 dwt bulk carriers, five 62,000 dwt woodchip carriers, two 1,800-TEU containerships and one 6,500 dwt conro vessel, with deliveries from 2018-2020.*Frasers Centrepoint: Entered a 19.9/80.1 JV agreement with TCC Assets to acquire and develop a leasehold site in central Bangkok into an integrated mixed-use development. The project, with total gfa of 1.83m sqm, will have a retail component, office towers, residences, hotels and serviced apartments.

*Raffles Medical: Acquired a 28,000 sqm land with building under construction in Liangjiang, Chongqing for the development of a 700-bed international tertiary general hospital. Construction is expected to be completed in 2Q18. The consideration payable for the land and construction costs incurred up to end Jan ’17 amounts Rmb188m..

*China Everbright Water: Won the Ji’nan Zhangqiu Urban-Rural Integration Water Supply project in Shandong, which commands a total investment of Rmb3.1b. CEW will hold an 80% equity stake in project, which has a 30 year concession period.

*Q&M: Expects to raise $9.1m net proceeds from the proposed-listing of its China dental equipment and supplies business Aoxin Q&M. Preliminary documents indicate that Aoxin intends to place out 57m new shares at $0.20/share.

*TEE Int’l: CEO Phua Chian Kin is offering to privatise the engineering firm via scheme of arrangement. Shareholders may elect a cash consideration of $0.215/share (12.6% premium over last traded price) or one new share in the Phua’s wholly-owned vehicle, Oscar Investment. The offer prices the group at 1.08x P/B.

*Ezion: Following recent acquisition of remaining stakes in several JVs with Swissco, the group is divesting its 50% stake in Teras Cargo Logistics, Strategic Offshore, and Strategic Excellence to Malaysian strategic partner Sea Explorer for US$70m. The transaction is expected to be completed by 2Q17.

*Low Keng Huat: 4Q16 net profit plunged 80% to $6.3m, bringing full year earnings to $55.7m (flat). Quarter revenue halved to $10.2m, largely weighed by the absence of construction revenue as the group is no longer tendering for third party construction contracts. The group also saw nil development sales in the quarter. Bottom line further dragged by $1.5m of other operating expenses, largely attributable to additional provisioning for impairment losses on the Balestier Tower project. NAV/share at $0.90.

*Olam: 75%-owned Nutrifoods Ghana has opened its newly expanded US$8.25m biscuit production facility in Ghana, doubling its capacity. Separately, the group is issuing ¥5.7b 0.47% fixed rate notes due 2022 under its US$5b euro medium term note programme. Proceeds will be used for working capital, capex, potential acquisition opportunities and other general corporate purposes.

*Saizen REIT: Terminated the proposed acquisition of 20 Australian freehold industrial properties from Sime Darby Property Singapore, which would have resulted in an RTO.

*FJ Benjamin: Divested loss-making NooTrees, a subsidiary that sells sustainable consumer products, to Lam Soon Singapore for $2.2m, and realising a gain of $1.79m.

MAS to stick with current policy stance despite recent stronger data: economists

FORGET the solid pace of Singapore’s economic growth in recent months.

That’s not enough to make Singapore’s central bank think about tweaking its exchange rate policy any time soon, or even this year at all, said economists.

In fact, instead of a near-term monetary tightening, one of them even expects the Monetary Authority of Singapore (MAS) to ease the policy band even further – a move often seen as a response to weakening growth.

Said NatWest Markets’ Vaninder Singh, who foresaw the last three MAS monetary policy decisions: “We are retaining our call for one per cent re-centring lower for the mid-point of the SG$NEER (nominal effective exchange rate) band in April 2017.”
Song Seng Wun, economist at CIMB, said: “From where we are, I would say there’s only a 30 per cent chance of tightening this year.”

Economists’ hesitation in calling for a tightening this year despite recent stronger growth numbers underscores a lack of confidence in Singapore’s future growth prospects.

If their predictions come to fruition, the current period of weak growth is effectively extended for another year.

MAS uses the exchange rate as its main monetary tool to maintain price stability so that there can be sustained economic growth in Singapore.

It does so by adjusting the currency’s pace of appreciation within the S$NEER band. It can target either the band’s slope, width or level.

To tighten the band, MAS would have to make the slope steeper or raise its level. This makes the Singapore dollar stronger. Imports become cheaper, and for Singapore’s trade-reliant economy, it tempers inflation.

A weaker currency will make exports cheaper, thus promoting growth.

MAS normally communicates its exchange-rate policy decisions twice a year – once in April and another in October.

But it kicked-off the current easing cycle with a surprise move in January 2015. It said that inflationary pressures were receding and global oil prices remained subdued.

MAS eased again in October 2015 and in April 2016, when the slope of the S$NEER band was put to zero.

MAS last said in October 2016 that this neutral policy stance was needed for an “extended period” of time.

The economic situation turned quickly thereafter, however. Fourth-quarter growth for 2016 came in stronger than expected – so much so that the full-year growth came in at 2 per cent, far beyond the government’s forecast of one to 1.5 per cent range.

This manufacturing and export-led growth may continue into early 2017. Citi’s Kit Wei Zheng expects Q1 2017 gross domestic product (GDP) to be 1.5 per cent higher than implicit forecasts in October last year.

This is enough to decrease some of the probability of a further easing move by MAS, said economists.

But even so, many economists are also not convinced that MAS will tighten in April. Maintaining the current stance is most likely, they said.

As for future moves this year, they do not see any signs of improvement to warrant a tightening.

For one thing, the jobs market is still quite weak, said Nomura’s Brian Tan. Unemployment seems to be rising, and jobs creation seems to be slowing. This will weaken consumer sentiment and thus dampen inflation – a major consideration in MAS policy.

Private investment – needed for capital expenditure and capacity expansion – in Singapore also does not seem to be picking up. Economists noted that the government even had to pledge to bring forward S$700 million worth of infrastructure projects to prop up the construction sector.

The strong demand for Singapore’s exports may not last too. Standard Chartered’s Jonathan Koh does not see a broad-based pick-up in global demand for Singapore’s electronics, which led the end-2016 growth spurt.

This is in part due to expected weak demand from China, Europe and the United States, and also due to geopolitical factors. The long negotiation process for the United Kingdom’s exit from the European Union was just triggered; US President Donald Trump is said to be wanting to re-examine all 14 US free trade agreements, dealing global trade another blow.

“Heading into the middle of Q2, or by the second half, we’re a bit more cautious about exports for Singapore,” said Mr Koh.

This uncertainty over the prospects for trade has made NatWest Market’s Mr Singh bearish enough to call for a monetary easing this year – putting him at odds with the general view of his counterparts.

Mr Singh expected this year’s growth to come in at one per cent. Though he found it “impossible” to predict what US President Trump might do with regards to trade, he also noted in a March 31 report that “even a slight change in trade performance will produce an outsized move in overall GDP (for Singapore), given exports’ 200 per cent share in output”.

“A re-centring – the next available easing move – is a response to seminal moments when we either have an outright recession, or a severe downgrade to the economic outlook,” he said. “Singapore’s growth outlook fulfils these conditions.”

Fed Rate Hikes Raise Risks for Asian Nations Swimming in Debt

(Bloomberg) — Twenty years after the Asian financial crisis and a decade since the global credit crunch, the region is swimming in debt.
The debt binge is spread across companies, banks, governments and households and is inflating bubbles in everything from the price of steel rebar in Shanghai to property prices in Sydney. As the Federal Reserve raises borrowing costs, that means debt is again a concern.
Exposure to China’s slowdown, fluctuating commodity prices and currency volatility are just some of the risks. S&P Global Ratings estimates that of the almost $1 trillion in Asia corporate debt they rate that is due to mature by 2021, 63 percent of it is denominated in dollars and 7 percent in euros.
To be sure, there are sizable buffers too. Governments have strengthened their international reserves, hedging of risks has improved and deeper local bond markets offer alternative sources of finance. And while the Fed is tightening, ongoing massive monetary easing in Europe and Japan provides an offset. Interest rates remain low by historical standards and reflation is helping bring down servicing costs.
Still, the pace of borrowing is eye watering. A debt hangover in Asia matters because the region is the biggest contributor to global growth. Asia’s expansion will probably exceed 5 percent in 2017 and 2018, compared with about 3.5 percent for the world, according to the International Monetary Fund.
Here’s a look at the metrics in some of the biggest economies.
China
China’s total debt likely reached around 258 percent of the economy’s size last year, up from 158 percent in 2005. President Xi Jinping and his government have made curbing excessive credit and leverage a key priority this year though progress appears to be slow.
Much of the borrowing is at the corporate level, a sector that continues to be dominated by debt-laden state-owned enterprises, so-called zombie firms, with the IMF warning that China needs to urgently deal with company debt.
Then there’s local government borrowing and the murky world of shadow financing and off-balance sheet lending. There are already plenty of warning signals, with rising defaults of corporate bonds and the first-ever rating downgrade of a Chinese local-government financing vehicle.
South Korea
After years of low rates and a property boom that help prop up the economy, South Korea has been left with a hangover.
Record household debt of 1,344.3 trillion won ($1.2 trillion) has reached a level where repayment burdens are hurting consumption, and Korean officials worry that low-income households may default as the Fed’s tightening impacts domestic lending rates.
The country is also among the most indebted in the OECD, with the ratio of household debt to disposable income at 169 percent in 2015, versus the 129 percent average.
Japan
Japan is one of the most indebted nations in the world, with a gross government debt burden that is more than 2.5 times as large as its economy. And the government itself sees no prospect that it will be able to reach its target of primary budget surplus in 2020, which would be the first step to stopping the growth in national debt.
However, the nation has substantial investments overseas and domestic assets, which reduce the debt burden on a net basis. In addition, most corporate debt and all government debt is denominated in yen, and the vast majority of the state’s bonds are held domestically, so there is a lower risk of capital flight.
Australia
Australia’s household debt-to-income is a record 189 percent — much of it in mortgages. In the past year the value of housing-related debt outstanding climbed 6.5 percent, compared with just a 3 percent gain in household income, according to central bank Governor Philip Lowe.
Meanwhile, annual wage growth is at a record low and consumer-price growth is weak, meaning Australians can’t inflate away their debts as they have in the past.
“Slow growth in wages is making it harder for some households to pay down their debt,” Lowe said in Melbourne April 4. “For many people, the high debt levels and low wage growth are a sobering combination.”
The demand for debt comes from a scramble to finance property purchases in Sydney — up 105 percent since 2009 — and Melbourne where prices are similarly skyrocketing. Part of the demand is driven by record-low interest rates, some by local investors seeking an easy return and to take advantage of tax breaks, and part of it is Chinese investors looking to park cash offshore.
India
Although smaller than in some other Asian nations, there are various interconnected debt problems in India. The government debt-to-GDP ratio is nearly 70 percent, much higher than similar BBB rated sovereigns, Fitch Ratings Ltd. said in a report this month. And corporate debt is increasing, along with a rise in bad loans, which is causing risks for the banking sector.
Those bad loans mean the government has used taxpayer money to recapitalize state-run banks, but the amount is much smaller than what is needed. Fitch puts India’s recapitalization burden at $90 billion by 2019, while the government has committed only $10 billion in fiscal resources.
And with a narrow tax base, the government will have to fund those measures with more borrowing, raising the debt burden of the state.
Southeast Asia
Southeast Asian countries have relatively lower debt levels by Asian standards but leverage has increased in recent years with corporate and household debt becoming a particular concern in Thailand and Malaysia.
According to a recent Standard Chartered Plc report looking at the evolution of Asian leverage between June 2008 and June last year, Malaysia’s overall debt load rose to 240 percent of GDP, up from 173 percent of GDP. This is one of the largest increases of any country in Asia during the eight-year period, and leaves Malaysia, a middle-income nation, with debt on a par with the likes of Australia, the U.K. and Italy.
Singapore has the largest debt load in Southeast Asia, but the city-state is also one of the world’s wealthiest countries, with households holding assets worth $1.1 trillion under one estimate.
The Philippines and Indonesia have avoided the accelerating pace of leverage elsewhere, partly because of relatively less developed banking industries that make it harder for households to borrow. Indonesia also has strict fiscal rules in place, a legacy from past crises, that cap the annual budget deficit at 3 percent of GDP and total government debt at 60 percent of GDP.
To contact Bloomberg News staff for this story: Enda Curran in Hong Kong at ecurran8@bloomberg.net, Michael Heath in Sydney at mheath1@bloomberg.net, Jiyeun Lee in Seoul at jlee1029@bloomberg.net, David Roman in Singapore at droman16@bloomberg.net, Anirban Nag in Mumbai at anag8@bloomberg.net.
To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, James Mayger, Jeff Kearns
©2017 Bloomberg L.P.

Chapter 0: Genesis

It’s about time I write a proper introduction for SGstocksandshares (SGSAS) and answer the questions that I received over the years.The page About Me is a proper corporate resume, and a summary of me, myself and I. An introduction, however, should not …

House of Commons UK PM Theresa May Speaks – Live Video NOW

UK’s PM Theresa May is expected to make a statement to MPs later at 1130GMT and finally trigger Brexit Article 50. According to previous consensus, the statement should lean to the conciliatory tone, calling all Britons to unite ahead of this historical moment.
“When we leave the European Union we will have control of our budgets and we will decide how we spend our money”
“Invoking Article 50, we are putting into practice the democratic vote of the UK people”, says May, while suggesting that the Scottish government should “do the same with the 2015 referendum on the independence of Scotland”

taken from : https://www.fxstreet.com/news/house-of-commons-uk-pm-theresa-may-speaks-live-video-201703291139 

Parkson, TungLok, Noble,Sunningdale,Kimly

The market could retreat today, taking cue from Wall Street weakness after the push-back of Healthcare bill vote cast doubts on the fate of other pro-growth policies.

Currently watching:

Parkson: quite stable over 118 to 120 price. possible that it may move up.
TungLok: a sudden spike in volume this week. They have a change of COO in Nov 16
Noble: i think may drift lower. Maybe will break 180. no upcoming news.
Sunningdale: Chart tells a possibility of privatisation. Few cents shy of 1.80.
Kimly: Probably will drift lower due to contra players.

my 2 cents.

thank you all for your insights.

Stocks to watch:
*Keppel Corp: Wholly-owned Keppel Land signed a MOU with Vietnam’s State Capital Investment Corp to collaborate on investment opportunities in Vietnam. The group currently has about 20 mixed projects in Vietnam and the deal is expected to deepen its presence in the market. MKE last had a Sell with TP of $4.57.

*Wee Hur: Secured a $22.8m contract from PUB to build a six-storey office block and redevelop existing WaterHub Building at 80 & 82 Toh Guan Road East. The project will commence on 31 Mar, and is targeted to complete within 15 months.

*Healthway Medical: Struck deal for revised convertible notes of $70m to be issued to PE firm Gateway Partners. The 1st tranche of $10m will be issued by 25 Mar, while the remaining $60m is subject to shareholders’ approval on 21 Apr. The notes carry no coupon and are redeemable five years later, plus a cash redemption premium upon maturity or default, translating to a 6% IRR for Gateway.

*Auric Pacific: Privatisation offer by Stephen Riady and CEO Andy Adhiwana have reached 95.8% acceptances. The offer will close on 7 Apr.

*MMP Resources: Announced that its ski resort partnership in Niseko, Hokkaido, Japan, has made $46,454 profit in Feb, and estimates that it could hit a projected ROI above 30% for the season ending 25 Mar ’17.

*3Cnergy: Undertaking a renounceable non-underwritten 1-for-3 rights issue at $0.067 apiece, which will be attached with two warrants with an exercise price of $0.10 each for each rights share subscribed. Maximum net proceeds of $25.4m are intended for the phase 1 development of a plot of land in Nusajaya, Malaysia into a mixed-used development.

*Mapletree Industrial Trust: Issued $100m 3.16% fixed rate notes due 2024, under the $1b multicurrency medium term note programme.

*Cosco Corp: 51% owned Cosco Shipyard delivered a module carrier, Bigroll Beaufort, measuring 173m length, 42m breadth, and 12m depth, to its European buyer.

SIA

Good morning,

SIA (SIA SP) had underperformed the STI over the past three months but we expect the stock to at least market-perform in the near term. Our reasons are as follows:

  • Relatively low valuations, which limit downside risk. SIA is currently trading at 0.69x FY18F book value ex-SIAEC, -1SD below long-term mean.

  • SIA is a potential beneficiary of diversionary traffic from China to Singapore, as the group has a 52% share out of Changi. According to Bloomberg, China has asked tour agencies to limit travel to South Korea, in an apparent retaliation against the South Korea’s deployment of Thaad missiles.

  • SIA could also benefit from a potential cargo recovery. IATA notes that global PMI new orders have been trending up and this bodes well for air cargo. Global cargo traffic rose 6.9% in January, with Asia Pacific airlines contributing to the bulk of the growth.

  • We believe that SIA is a better beneficiary of any cargo recovery, given its lower capital cost and fuel hedges. SIA will have greater leverage from improving cargo traffic and loads compared with Cathay Pacific (CX, 293 HK) as SIA had written down the value of its freighters and would thus have minimal capital costs. SIA also has fuel hedges at lower levels, vs CX’s hedges (US$75-90/bbl).

For now we maintain our HOLD recommendation, but downside risk is relatively low at current levels. Newsflow will likely be positive and we expect share price to gradually head towards our target price of S$10.40. Suggested entry: S$9.90.

M1’s Trading Halt

sharing for convenience.

(Bloomberg) — M1 Ltd.’s owners are exploring options including a sale of Singapore’s smallest mobile operator as the city-state gears up for a new entrant into the wireless market, according to people with knowledge of the matter. Keppel Corp., Axiata Group Bhd. and Singapore PressHoldings Ltd. are working with an adviser to conduct a strategic review of their combined 61 percent interest in M1, the people said, asking not to be identified because the discussions are confidential. The carrier, which offers fixed-line and mobile services to more than 2 million customers, has a $1.3 billion market value. The potential sale of Singapore’s third-largest carrier comes as the city-state prepares for the roll-out of a fourth mobile operator with TPG Telecom Ltd. slated to begin wireless services in 2018. The regulator has said it wants to introduce more competition in the city-state to bring down phone bills and improve services. Temasek Holdings Pte has studied ways for Keppel, a portfolio company, to divest non-core assets including its stake in M1, as part of a regular review of investments, people familiar with the matter said in January last year. Executives at the state investment company had also discussed the possibility of Keppel paring its stake in office landlord KeppelREIT. Malaysian wireless carrier Axiata has a 29 percent stake inM1, while Keppel has a 19 percent holding and Singapore Press owns 13 percent, according to data compiled by Bloomberg. A representative for Axiata didn’t immediately respond to emails seeking comment. Representatives for M1, Keppel and SingaporePress didn’t immediately respond to Bloomberg queries. Plans to sell Singaporean telecom stakes have made little progress. Shareholders in the second-largest operator StarhubLtd. were weighing a sale in July, with Qatar’s Ooredoo QSCseeking to sell its indirect stake in the carrier, people familiar with the matter said at the time. The city state’s current telecom operators includingSingapore Telecommunications Ltd. and StarHub are likely to see average revenue per user decline by as much as 16 percent in the next five years, according to OCBC. TPG Telecom may gain the mobile revenue market share of about 6 percent by 2021, the research firm said Friday. 

M1 is now trading at 7.3x EV/Trailing EBITDA, compared to Starhub at 8.15x and Singtel at 15.4x.